NRI group sues ICICI for $103 mn in Mauritius for investment losses
A group of 69 non-resident Indian investors out of about 500, most from the Gulf countries, has dragged ICICI Bank, among other associated companies to the Mauritius Supreme Court, alleging losses worth $103 million in their investments made in a real estate fund.business Updated: Oct 28, 2014 23:40 IST
A group of 69 non-resident Indian investors out of about 500, most from the Gulf countries, has dragged ICICI Bank and ICICI Venture, Dynamic India Fund III among other associated companies to the Mauritius Supreme Court, alleging huge losses in their investments made in a real estate fund. The group is claiming damages worth $103 million.
The Dynamic India Fund III was set up as a special purpose vehicle for overseas investors to invest through India Advantage Fund III in the domestic real estate market. The 69 petitioners invested around $35 million in the fund. The petitioners have alleged that the fund, promoted by ICICI Ventures and ICICI Bank, invested in 13 projects in India and even after completion of nine years of the investments, none of them were completed except for one.
“It is a classic case of total neglect of due diligence, research of suitability taking into account of exit term, outrageous underestimation of cost and completion, alleged negligence and overt manipulation of the finances for escalating costs and serious blunders in judgment of selection of projects,” the petitioners said.
ICICI Ventures said the allegations levelled were totally “baseless” and “malicious,” and the company will take necessary steps based on legal advice.
“ICICI Venture manages assets of over $2.5 billion and has delivered returns to investors across various private equity funds. It is common knowledge that globally PE as an asset class doesn’t guarantee returns given the equity risks involved. Also, realty projects have a long gestation period,” it said.
It has extended the fund’s life by three years and offered investors cash exit option, ICICI Ventures said.